Author Topic: I shaved....  (Read 5291 times)

seanquixote

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I shaved....
« on: April 18, 2013, 12:13:51 PM »
First Post...Great Forum.

Don't know where to start so I'll just tell a bit about myself and then ask for some guidance.

Age:38
Married w/ three kids (ages 13, 5, and 18 months)
Yearly income: 50,000 (plus a fairly reliable $10,000) bonus = 60k
Mortgage: 109,000 (still owe 90k)$630/month
Student Loan: 8k
NO CREDIT CARD DEBT !!!!
$3,500 left on my truck.  Currently working to get that GONE.
Work in IT and IT is absolutely KILLING me...
Have 5k in Savings acct.
30k in 401k vanguard account

My goal is to get back into teaching guitar (which I did full time 25-30 students for 7-8 yrs before marriage)

The income isn't always steady teaching guitar...but it pays well and I mean you have a guitar in your hands while you are making $$$ it doesn't get much better...(well except maybe playing a stadium or something..).  I have given lessons off and on (mostly off) for a few years since then, but it was always for a very few students.

My better half and I have been sticking to (trying to stick to) the plan of having the house and all debts gone in 4 years, which is 'doable', but from time to time I wonder if it's practical.  I hate "deferring" the move out of my current job for 4 more years, but I've been here 5 and a half already...

Back in the day both the wife and I were much more "mustachian" we lived in a house that cost us $85/month for the mortgage..(gawd i miss those payments).  I used to work maintenance and had a small apartment painting business (which i actually really enjoyed).  She worked as an optician and made good money and I eventually got my degree and started teaching English and Computers...We 'stached away the money like MAD and we're on track to do whatever the fuck we wanted by this point.  Long story short, she stopped working, we moved, spent LOADS of $$ during the last 6-7 years, I cannot say on exactly what.  We ate out ALOT got fat, and just messed up in every way possible.  We used to really follow our budget, but lately it has flown out the window.  Yes i KNOW that is stupid...but I'm being honest and we just have not been following the $$ like we should.

My wife stays home with the little ones and we really would like to keep it that way, but I think it is going to cause me to work this job or something like it until i'm ready for SS or a straight-jacket.  My retirement savings are shit, my cash on hand is shit, our ability to follow the $$ trail is shit...

How can i get my shit straight?  We have recently been on a huge minimalist kick (I've sold 13 of 15 guitars as well as a TON of other shit).  We both feel really good about killing debt and reducing the 'stuff' habit.   Not to mention that both of us have lost insane amounts of blubber in the last year...I lost 65 lbs. have another 35 to go.... So I don't want to beat myself up about everything...but we are finding it next to impossible to stay on track.

I'll list out the expenses that I can come up with (I'm sure there are others):

Mortgage: $630 (2.87% interest on a 15yr)
Truck:$272
Student Loan:$112 (1.62% interest rate)
Groceries:~$450-500
Gas for Cars: $240
Elec:~$100-150
Netflix:$8
No Cable
Mrs. is on pre-pay phone (work pays for mine)
Interwebs: $45
Water: $30-35

 

-Seanquixote

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Re: I shaved....
« Reply #1 on: April 18, 2013, 12:50:30 PM »
Yeah, I agree -- don't beat yourself up.  You're already way ahead of most people by just recognizing you have a problem.  And in a lot of ways you guys sound like you're doing well (congrats on the weight loss -- that will lead to monetary savings and improved quality of life for years to come).  Based on what you've posted as your expenses (of which, more below), the usual suspects here are your driving habits and electricity usage. You can find various articles on this website and others on fixing these things, like cycling to work, or getting a more fuel-efficient car.  I used to work in IT, and so I know that you sometimes have to haul some stuff for that job, but most of the time it would fit into a car trunk or back seat.  You may be able to get around just fine without a truck and switch to a more fuel-efficient used car. 

When I add up your expenses, I get around $27k per year.  So you must be spending money on other stuff to have so few savings.  Clothes?  Dining out?  School supplies?  Christmas and birthdays?  Employee contributions to health coverage?  I'm a big fan of the Your Money or Your Life approach.  Start tracking your expenses every month (all of them).  You'll easily be able to see where you're spending.  I never cease to be amazed at how quickly all the little purchases add up.  Turn math into your ally, rather than your enemy. 

And if you work in IT, the potential upside with the right qualifications is pretty big.  Maybe look into increasing your income. 

Good luck!

Done by Forty

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Re: I shaved....
« Reply #2 on: April 18, 2013, 09:20:19 PM »
As a temporary stop gap, might a change of scenery to a new IT job (or two) get you over the hump?  I've found that a new job can provide 12-24 months of "interesting" almost regardless, just from its novelty.  And if you happen to get a pay jump, all the better. 

I can appreciate how a career you're not suited to can wear you down.  Given your field, I'd jump from IT to IT job until you've hit your debt-free goals, and with some of Magnitude's advice above (pop pop!), it may happen a bit quicker than you think.

The other option is for both you and your wife to work temporarily, and then you can potentially hit those goals very quickly.

expatartist

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Re: I shaved....
« Reply #3 on: April 18, 2013, 10:25:41 PM »
It sounds like you're doing better than most in your situation!

A new job for you might be something to look at. Four years is long enough at one place. Update your LinkedIn profile, get fresh recommendations there, network in your field online, contact former colleagues/friends & see what's out there.

Also, if your wife isn't the entrepreneurial type, she can work from home until your youngest is in school. Lots of what's out there is mind-numbing, but every dime helps. She could start by doing the brainless work-at-home stuff to pay for training for a certificate.

I'm using Coursera for free interesting classes. She/you might find something right for you there, too.

seanquixote

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Re: I shaved....
« Reply #4 on: April 19, 2013, 07:09:29 AM »

I appreciate the input so far...I agree that a change of scenery is definitely required.  Unfortunately part of my problem is during the last 5 or so years, I've really turned into a wuss.  I have always been a bit of a gypsy and willing to jump at the next adventure.  But lately when I think "hell I'm going to go for it.." there is another voice that says "you're a dumbass, you have a cushy job and your going to f it up."

I hear alot of people tell me "why the hell are you working here...you should be bringing down $$K at such and such place.."
but I guess I just am not seeing it.  What many of them don't understand is that just because I seem like a PC wizard here,  I don't really have the qualifications for many of those big dollar jobs.  I got a CCNA cert. 3 years ago with the hopes that I could find a job that was more interesting...the problem was those jobs paid 10-15k less than what I was making.

I am in fairly rural KY and am an Admin over around 300 or so PC's, Servers, etc..The Mrs. and I are up for almost anything, but we are very cautious about not messing up a good situation for a bad one.  We are up for a move (within reason...).  One of the problems is that in the past we thought this change or that move would be good...but they turn out to be a "Golden Turd" after you get beneath the finish...its shit.  We usually would end up worse off.

This post has got me sounding too complainypants...so I'll stop there.  On the upside, after speaking with my wife last night, we have decided to get back on the wagon budget-wise and really track those dollars.  It seems like the only way to make things happen. 

Spork

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Re: I shaved....
« Reply #5 on: April 19, 2013, 07:32:56 AM »
I am in fairly rural KY and am an Admin over around 300 or so PC's, Servers, etc..The Mrs. and I are up for almost anything, but we are very cautious about not messing up a good situation for a bad one.  We are up for a move (within reason...).  One of the problems is that in the past we thought this change or that move would be good...but they turn out to be a "Golden Turd" after you get beneath the finish...its shit.  We usually would end up worse off.


Rural/small towns can be hell on tech jobs unless you are in a position to work remotely.  (And even then, sometimes reliable internet can be difficult.)  There are some benefits to the small town/rural lifestyle.  It becomes a decision on which is more important for you and your family.

I gave up about 40% of my salary to move to a small town.  That's not complainypants.  It was a trade and the monetary loss was replaced with other gains.  If you want more money, the big city is where it's at.

seanquixote

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Re: I shaved....
« Reply #6 on: April 19, 2013, 08:15:12 AM »

Well that's it...for a small rural town...my salary is pretty great.  Ultimately for me it has little to do with money and EVERYTHING to do with doing what I want to do.  I have run the numbers in the past and even tried working through Fiskars formulas etc..and I just don't see a full FIRE is in the cards for me.


I don't see myself NOT working some part-time job, ever.  But I would really like for it to be on my terms.  I know to some people teaching guitar sounds like a "eh..you'll stay broke" proposition, but the truth is...a person can make a decent living doing it.  I used to have ~30 students when I was working it hot and heavy.  30 students at $25/lesson is pretty damn good money for half hour lessons.  In the right program/situation I could have even more students.  Don't get me wrong the gig had its downsides too...but all of the upsides made those minimal.  But that was at bit of a bigger town, and I knew the store owners really well.  It's difficult to get back into a situation where you are "fed" new students.  Which is why I am looking really hard at getting through the Suzuki training for all the books and trying to find a program to work with.

Assuming we do pay off the house in the next 4, I still don't see how we can get to FI before the normal/standard time.  My pipedream is/was to pay off house (and anything else) and then work really hard to move into guitar teaching FULL time (which full time would be like 20+ hrs a week..ha ha).  I could see myself doing that for a long time in the right situation.  Does that sound foolish?

superheropunk

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Re: I shaved....
« Reply #7 on: April 19, 2013, 12:58:14 PM »
I'll chime in and say your expenses already look pretty good considering the family size... Just having no credit card debt is AWESOME although your 401k savings are really low....

Think you could probably work on earning more income... That salary seems kind of low but guess considering where the area is... Go figure....

Once you pay off the truck keep making that payment but make it to yourself and over time you will have money making money that will supply you with future vehicles as they are needed...

Wouldn't even worry about the student loan. Just keep paying the monthly payment till the debt is gone...

Do you have a High Deductible Insurance plan with a Health Savings Account or do you have a Flexible Savings Account? I see in your expenses you have nothing for health care....

What about clothing for the children, etc??? Are they not adding to your expenses each month?




seanquixote

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Re: I shaved....
« Reply #8 on: April 19, 2013, 05:35:54 PM »

Yeah, I do a Flex Spending deal through work.  The benefits are pretty decent.  The kids definitely cost $$ and that is in there with the part of the budget that we have no idea about.  As far as the truck goes...the question of "is it needed?" well that's a bit relative.  I used it to haul schtuff off or out 4 different times this week. (but it was an unusual sort of week).  I could sell it and get something else I'm not super attached to the thing ...well at least I don't think so.  Come to think of it, yes, yes I sorta am attached to it a bit.  More than anything I'm just glad to have a non piece of crap vehicle for once in my life.  It's not brand new (an '08) but it's the newest thing I've ever had.  So I'm still debating that one.

As far as clothing the kids, should have mentioned my wife works one half day a week at a clothing store and gets HUGE discounts for the kids...i mean we are talking $2 for a brand new pair of jeans when on clearance w/ her discount.  Plus the MIL works at another clothing store and sends us loads at X-mas.  So clothes are not a huge expense.

I suspect that we are still spending more than we think eating out....that's why we really have to get with it as far as tracking.  I mean with 5 of us even going to Taco Scmhell is expensive. What are some ways y'all make $$ tracking simpler/easy?

NumberJohnny5

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Re: I shaved....
« Reply #9 on: April 19, 2013, 09:03:56 PM »
Ok, maybe I'm not good at math, but here's the numbers I put in ol' calc.exe (where you gave a range, I averaged it out):

$630
$272
$112
$475
$240
$125
$8
$5 (you didn't give a figure for your wife's prepaid, so I made one up)
$45
$32.50

equals $1,944.50/mo, * 12 months = $23,334/yr

Is your $50-$60k/yr pre or post-tax (with three kids, I'm guessing both numbers are fairly close)?

Some important/essential numbers I think you're forgetting are insurance (health, house, and car), car maintenance (include regular maintenance like oil changes and new tires, irregular maintenance like the inevitable new transmission, and somewhere you need to add in registration fees), property taxes, things like that. I'm sure that'll bump up your numbers a decent bit. Even still, I'm guessing that all the "essentials" are only costing you around $26-$30k a year. That gives you between $20-$34k/yr extra, WITHOUT changing any of your current essential spending (i.e. no trading in the truck, driving less, reducing grocery bills, etc.)

The non-essentials are what's really getting you now. You need to sit down with at LEAST a month's worth of expenses (three would be better, six months would be pretty darn good) and see where all the money's going to. Family of five, it's REALLY easy to spend $50/wk on going out to eat, without even trying. Heck, one trip to McDonald's can wipe out half of that. $50/wk times 52 weeks = $2,600. Even if you're currently spending $100/wk, if you get that down to the "extravagant" $50/wk figure, that's still $2,600/yr in savings.

Careful on all the clothing "savings". $2 for a pair of pants...are ALL the clothing bought that good of a price? Or just an example of how good it CAN be? If there's piles and piles and piles of clothes everywhere, and you're donating a bunch of stuff because it's hardly been worn...you're buying too many clothes.

Here's what I would do:

#1, track those expenses. See what you've been spending money on, decide what you WANT to be spending money on, and come up with some kind of budget. You don't have to budget every single thing; I mainly budget items that can easily get out of control (we didn't budget groceries at first, until the spending ballooned to $150/wk; now we're down to $90/wk).

#2, give the kids an allowance. Break it down however you want (we do 40% spend, 30% save, 20% invest, and 10% donate). Oldest kid could have a clothing budget as well. Now this is important...give them the money, let them spend it on whatever they want (long as it's legal of course...for clothing you'd make sure the bare minimum required for school is purchased, but let them decide whether to spend $200 on shoes and 50cents for jeans at the thrift store). And DON'T BUY THEM CRAP throughout the year; birthdays can be a cake and a SMALL present, Christmas can be a bit more (we probably spent under $10 per kid for Christmas, though my mom spent more like $100). If they want something, tell them "sure, if you have the money..." Yeah yeah, many will say "you shouldn't give kids an allowance not tied to chores" or what-not...but if you're buying them stuff all the time, what's the difference?

#3, reign in the dining out spending. I'm 96% sure that's a big part of your expense. Set an amount, and as long as the spending is kept under control, no need to feel guilty. So if you budget $50/wk, then go to McDonald's twice a week, or that fancy restaurant once every two weeks, or whatever. Don't feel guilty about the money spent on it, though you should regularly sit down and rethink your priorities (and decide if the eating out budget should stay the same, be increased, or decreased).

#4, if you get that $10k bonus, dump it straight into a Roth IRA. Don't depend on that money. In fact, you should be walking around for a few weeks with a dazed look on your face, cause you're not sure where to put that bonus (because hopefully you can eventually increase the 401k savings, AND contribute regularly to your Roth IRA, so the $10k will actually be somewhat "unexpected"). FYI, the contribution limits for Roth IRAs have increased to $5,500 per person; so a married couple can put in $11,000/yr total.

Rough estimate, I say it'd take you about a month to really come up with a plan and execute it. Three months after that, I think the truck would be paid off. Another five months should see the student loan vanquished. So within 9 months, you can be free of all non-mortgage debt and have $10k+ in Roth IRA accounts; what a great way to start the new year! If you really buckle down (reduce grocery spending to $400 or less a month, trade in truck for cheaper more fuel efficient car, reduce electricity costs, etc.) then you could be there by this Thanksgiving; now that's something to be thankful for!

Oh, on burn-out and wanting to move around and make more money; I'm assuming (possibly incorrectly so) that there's something like a "travel IT guy"? Where you can take a 3-6 month contract somewhere, really make bank, and then move on to the next? I dunno...but I know there's such a thing as travel nurses, and it can be a good way to see the country and make some money at the same time. If you can get contracts in a high cost of living place like Alaska, and live the rest of the year in a low cost of living place like Kentucky, you're doing pretty good.

Edit: To keep track of our budget, I use eeba on our Android phones (there's an iphone version as well). Whenever we spend something that's tracked (groceries, going out to eat, our misc money) we put the amount on our phone. They sync with each other, so if I spend $50 on groceries in the morning, my wife will notice when she tries to go out that evening after work. To look at the "big picture" I'm trying out YNAB. It's not quite setup the way I'd want, but it does make it easy when my wife asks about account balances and I can just fire it up. Can be a good motivation to not spend once you've reached a certain milestone (i.e. once your net worth hits $50k, you want a good cushion before you make a big purchase, cause you don't want it to fall back to $40k-something).
« Last Edit: April 19, 2013, 09:07:33 PM by josetann »

seanquixote

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Re: I shaved....
« Reply #10 on: April 21, 2013, 03:33:26 PM »


josetann,  Thanks for this reply.

The 50-60k is pre-tax.  Health costs are a tough one...we just paid for braces for the oldest. And I would say that about once every three months somebody is visiting the Dr., usually just for "wellness" checks that are fully covered.  But recently we've had both of the lil' ones to the Dr's several times for strep.  Car insurance runs about $650 or so every 6 months.  so there is $100+ that is un-budgeted.  Property taxes are around $1000 per year so there's another $100 or so per month.

The non-essentials ARE definitely what we have to get track of...I have recently been back to working with Mint.com in hopes of trying to auto-track/categorize some of these expenses.  Funny how I kinda forgot I had set up a Mint acct. over a year ago.  As I suspected Fast-Food is kicking our asses...still

Clothing really is a minor expense for us it looks like.  But it needs to be factored in...and I'm not 100% certain what we need to budget for this yet.  The good thing is every Fall and Spring the Mrs. sends outgrown clothes to a huge consignment sale that happens here 2x a year...and makes a bit of $$.  I think she made ~$300 last time.  So not bad at all.

As far as the bonus, that is kind of factored into us paying off the house early...which we still are very focused on.  We really need to think about weather paying off the house is a bigger priority than retirement right now.  On paper I'm sure that we should be 'staching away most toward an IRA or 401k.  Maybe there is a compromise to be had there?  However the thought of not paying the bank shit in just under 4 years makes me salivate more than a stack of pancakes w/ maple syrup.

I believe your are spot on about needing a month or 3 of expenditures in order to really nail down where it is going.  We are going to try to go through the six months that Mint is showing and see if we can put everything in it's place.  I'm not sure there is alot of fat to trim in the budget...but I KNOW there is some.  Here's hoping that we can do it and not be at each others throats in the process..."You spent how much at the friggin' craft store?!?!?"...."You spent HOW MUCH on guitar-shit?!?!?"

Thanks again!